Arcadia Biosciences (RKDA) Announces Fourth-Quarter and Full-Year 2023 Financial Results and Business Highlights
- Arcadia Biosciences, Inc. (RKDA) has achieved a second consecutive year of gross profit growth.
- The company's SG&A expenses have decreased to the lowest levels since 2019.
- GoodWheat products are now available in more than 3,500 stores and have expanded into new categories like pancake/waffle mixes and mac & cheese.
- In the fourth quarter of 2023, total revenues increased by 57% compared to the same period in 2022.
- Operating expenses decreased by 16% in the fourth quarter of 2023, leading to an improvement in net loss for the quarter.
- Arcadia Biosciences, Inc. is exploring strategic opportunities with Lake Street Capital Markets to maximize shareholder value.
- Total revenues decreased by 28% for the full year of 2023 compared to 2022.
- Net loss attributable to common stockholders was $2.8 million for the fourth quarter of 2023.
- There was a net loss of $14.0 million attributable to common stockholders for the full year of 2023.
- The company experienced a $821,000 net loss from discontinued body care brands in 2023.
The reported financial results from Arcadia Biosciences indicate a mixed performance, with a notable 57% increase in quarterly revenues, yet an overall annual revenue decline of 28%. This growth in the final quarter is a positive signal, potentially reflecting successful product launches and market penetration. However, the annual revenue drop requires further analysis to understand the underlying causes, such as market demand shifts or operational challenges.
Cost management appears to be a strong point for the company, with total operating expenses decreasing by 10% annually, which includes a significant reduction in selling, general and administrative expenses. This disciplined approach to cost control can be seen as a strategic move to improve the company's financial health and work towards profitability.
Expansion into new product categories, such as the 'better-for-you' segment with GoodWheat pancake/waffle mixes and mac & cheese, is an attempt to capture a growing consumer trend towards health-conscious food options. The 'Heart Healthy' certification for GoodWheat pasta by the American Heart Association could enhance brand credibility and consumer trust, potentially leading to increased sales.
The reduction in net loss attributable to common stockholders, improving by 9% year-over-year, is a positive development for Arcadia Biosciences' investors. The earnings per share improvement from a loss of $25.65 to $11.30 reflects better control over expenses and possibly a more focused business strategy after discontinuing the CBD body care brands.
However, the company's operational performance, with a net loss from continuing operations, signals that despite cost-cutting measures, the path to profitability is still challenging. Investors should closely monitor the company's ability to translate product innovations and market expansions into sustainable revenue growth. The strategic review process initiated with Lake Street Capital Markets could result in various outcomes, including acquisitions or mergers, which may significantly impact the company's future financial health and stock performance.
Arcadia's pivot towards health and wellness products aligns with current market trends, where consumers increasingly demand nutritious and convenient food options. The introduction of GoodWheat and Zola coconut water products with health-centric features, such as high fiber content and no added sugars, positions the company favorably in a competitive landscape.
The nutrition industry is witnessing a surge in 'functional foods' that offer additional health benefits beyond basic nutrition. Arcadia's GoodWheat products, particularly the high-fiber mac & cheese and pancakes, cater to this demand. The American Heart Association's certification for the pasta line can be leveraged as a marketing tool to differentiate the products in a crowded marketplace.
However, the success of these initiatives hinges on consumer acceptance and the company's ability to scale distribution effectively. While the expansion into over 3,500 stores is a testament to the brand's growth, maintaining momentum and capturing significant market share in the 'better-for-you' category will be important for long-term success.
-- Second continuous year of gross profit growth --
-- Total SG&A expenses declined to the lowest levels since 2019 --
-- GoodWheatTM now in more than 3,500 stores with better-for-you pasta, pancake/waffle mixes and mac & cheese --
“We are now at the halfway point of Project Greenfield, our three-year strategic plan to unlock the company’s potential and provide a path to profitability, and the results of this focus are unmistakable,” said Stan Jacot, president and CEO. “Arcadia has significantly improved quality of revenues and has now delivered two straight years of gross profit growth for the first time in its history. SG&A expenses have declined for two straight years and are at their lowest level since 2019.
“The foundation we have laid over the past two years provides optimism for even stronger results in 2024. GoodWheatTM is now in three categories with pasta, pancakes and mac & cheese, and garnering national attention. Zola® coconut water is leveraging innovation to expand distribution and is anticipating double-digit growth in 2024. We have right sized the organization and streamlined our cost structure in order to extend our runway. And finally, we remain focused on adjacent acquisitions as well as monetizing our IP,” Jacot said.
2023 Key Operating and Business Highlights
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GoodWheat Expands Into Two New Categories with Better-For-You Pancake and Waffle Mixes, Single-Serve QuikcakesTM and Mac & Cheese. Building on its success with GoodWheat high-fiber pasta, Arcadia launched two new product categories in 2023: pancake/waffle mixes and mac & cheese.
Launched in Q3, Arcadia’s pancake and waffle mixes are made with simple ingredients and its proprietary GoodWheat flour, delivering the same delicious taste and texture of regular pancakes with 8-11 times the fiber and 5-7 grams of protein per serving. GoodWheat single-serve Quikcakes, in Buttermilk, Chocolate Chocolate Chip and Confetti flavors, are available nationwide on Amazon, and both Quikcakes and Multi-Serve Pancake & Waffle Mixes, available in Buttermilk, Chocolate Chocolate Chip and Apple Cinnamon flavors, began shipping to retailers in August.
Arcadia expanded to a third category with the launch of GoodWheat Mac & Cheese in Q4, a family household staple representing more than$1.1 billion 20% of the category and are growing faster than traditional brands. GoodWheat Mac & Cheese packs in the most fiber of any brand in the category, with four times more fiber than the leading brand, as well as 12 grams of protein. One serving of GoodWheat Mac & Cheese has the same fiber as two servings of oatmeal or two and a half servings of broccoli. Available in three varieties – Classic Cheddar, White Cheddar and Three Cheese – GoodWheat Mac & Cheese began shipping to retailers in November 2023, and launched on Amazon in February 2024.
- GoodWheat Pasta Certified as “Heart Healthy” by American Heart Association (AHA). GoodWheat pasta received the AHA’s Heart-Check certification for all five varieties of its single ingredient noodles. With its high fiber, lower sodium and zero saturated fat, GoodWheat meets the AHA’s stringent standards for a heart-healthy pasta and provides consumers with a better-for-you option that delivers superior nutrition with the taste and texture of traditional pasta.
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Arcadia Streamlines Operations by Exiting CBD Body Care Brands. As part of its strategy to focus resources on high-opportunity, scalable businesses, Arcadia discontinued its two remaining Body Care brands ProVaultTM and SoulSpringTM in order to concentrate on the more promising GoodWheat and Zola brands. Streamlined operations and organizational changes resulted in operating expense savings of
$2 million $3 million $4 million
- Arcadia Explores Strategic Opportunities with Lake Street Capital Markets. Arcadia initiated a strategic review process in mid-2023 to explore a range of potential transactions and opportunities focused on maximizing the GoodWheat value proposition and driving long-term shareholder value. As part of this process, the company is exploring strategic options that may include potential acquisition, company sale, merger, business combination, asset sale, joint venture, licensing arrangement, capital raise or other strategic transactions.
Recent Highlights
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Zola Coconut Water Introduces Two New Flavors to Energize Sales. Arcadia has focused on innovation in Zola coconut water with the introduction of two new flavors – pineapple and lime – to add to its original, extra pulp and espresso flavors. Pineapple is the number one coconut water flavor, and Lime is the number one flavor in sparkling water, and both flavors are
100% natural, no sugar added and non-GMO. Launched in the first quarter of 2024, these new flavors are available in 16.9 oz resealable containers and will be placed in new distribution in Q2.
- GoodWheat Pasta and Pancake Mixes Receive Accolades From Trusted, Independent Testing Outlets. Following GoodWheat pasta’s 2023 recognition from the American Heart Association’s Heart-Check certification and its selection as “Best New Product” by the Retail Dietitians Business Alliance, GoodWheat pasta and pancake mixes received additional accolades from trusted outlets in the first quarter of 2024. Better Homes and Gardens, with 13 million followers across social platforms, recognized GoodWheat pasta in the New Basics category as the “Best Stealthy Healthy Pasta,” with the same flavor as regular pasta but four times the fiber. And Eat This, Not That, a website which has 7 million unique views per month, awarded GoodWheat Quikcakes recognition in two different categories in January: “Best Store-Bought, High-Protein Desserts” and “Best Store-Bought High-Fiber Snacks.”
Arcadia Biosciences, Inc.
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Three months ended Dec 31 |
|
Twelve months ended Dec 31 |
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|
2023 |
|
2022 |
|
Favorable/
|
|
|
2023 |
|
2022 |
|
Favorable/
|
|||||||||||
|
$ |
% |
$ |
% |
|||||||||||||||||||
Total Revenues |
1,170 |
|
744 |
|
426 |
57 |
% |
|
5,330 |
|
7,418 |
|
(2,088 |
) |
(28 |
%) |
|||||||
Total Operating Expenses |
4,534 |
|
5,402 |
|
868 |
16 |
% |
|
19,268 |
|
21,425 |
|
2,157 |
|
10 |
% |
|||||||
Loss From Continuing Operations |
(3,364 |
) |
(4,658 |
) |
1,294 |
28 |
% |
|
(13,938 |
) |
(14,007 |
) |
69 |
|
0 |
% |
|||||||
Net Loss Attributable to Common Stockholders |
(2,853 |
) |
(4,244 |
) |
1,391 |
33 |
% |
(13,981 |
) |
(15,376 |
) |
1,395 |
|
9 |
% |
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Certain previously reported financial information has been reclassified to conform to the current year presentation. Reclassifications are related to the presentation of the financial results of our former body care brands as discontinued operations. The financial information above and narrative that follows relate to continuing operations unless stated otherwise.
More detailed financial statements are included in the Form 10-K filed today, available in the Investors section of the company’s website under SEC Filings.
Revenues
Revenues in the fourth quarter of 2023 increased
Revenues decreased
Operating Expenses
Operating expenses decreased
Operating expenses decreased
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the fourth quarter of 2023 was
Net loss attributable to common stockholders for 2023 was
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern time (1:30 p.m. Pacific time) today, March 28, to discuss fourth-quarter and year-end results and the year’s key strategic achievements. Interested participants can join the conference call using the following options:
- An audio-only webcast of the conference call will be available in the Investors section of Arcadia’s website.
- To join the live call, please register here, and a dial-in number and unique PIN will be provided.
Following completion of the call, a recorded replay will be available on the company’s investor website.
About Arcadia Biosciences, Inc.
Since 2002, Arcadia Biosciences (Nasdaq: RKDA) has been innovating crops to provide high-value, healthy ingredients to meet consumer demands for healthier choices. With its roots in agricultural innovation, Arcadia cultivates next-generation wellness products that make every body feel good. The company’s food and beverage products include GoodWheat™ pasta, pancake mixes and mac & cheese and Zola® coconut water. For more information, visit www.arcadiabio.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the company and its products, including statements relating to the company’s growth, cash position, operating costs, financial performance, commercialization of products and review of strategic transactions and their impact on shareholder value. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to, the risks set forth in filings that the company makes with the Securities and Exchange Commission from time to time, including in Arcadia’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings. These forward-looking statements speak only as of the date hereof, and Arcadia Biosciences, Inc. disclaims any obligation to update these forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240328469268/en/
T.J. Schaefer
ir@arcadiabio.com
Source: Arcadia Biosciences, Inc.
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